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TranceAddict Investors Club @ Marketocracy (pg. 105)
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| Groundhog Boy |
Thoughts on today? I picked up WB yesterday after it fell pretty far (not the bottom, though) and sold today on a pretty hefty move and was actually able to make up for Monday's vomit inducement.
Would any of you touch GS (or even MS if it dips low again, not after the 100% range today) right now to reinvest the proceeds? Do you think that the fear-laden free-fall in financials might have been curbed by today's rumors or that we're heading much further south soon?
UK bans short selling financials. Wouldn't just reinstating the uptick rule have been a more moderate move?
Haven't heard anything about this trust to house bad debt except the rumors that were floating around yesterday. |
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| Krypton |
If you're going to invest in a bank, invest only in one you think has a solid balance sheet. I analyzed the Dow Jones maybe a month ago and the best bank I got was JP Morgan. Here are the results, according to something I call the Nathan Multiple (NM), named after myself of course...The lower the NM, the better.
THIS LIST IS RANKED FROM WORST TO BEST
1. C -> 2.83
2. BAC -> 2.69
3. JPM -> 1.49
So according to the Nathan Multiple, JPM is the only bank on the Dow Jones which is expected to increase earnings, even though by 2%, that's better than 0% to negative %. I value JPM around $43, and today it rose 12% to $40, so according to my valuation, it's only 6% undervalued. BAC and C are both valued at more than 30% undervalued, but they carry higher risks, because their expected earnings growth is negative, and the Nathan Multiple values earnings growth as the most important factor in the equation. But also keep in mind that BAC is thought of as one of those "fortress banks", so it may not be that risky in the long. But then again, we're talking about the financial sector and they have royally f*cked themselves over...
EDIT: also, the last time i analyzed JPM's fundamentals, I got a high HOLD rating. All in all, this bank will weather this storm with no problem. Hell, they bought Bear Sterns! |
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| Groundhog Boy |
| quote: | Originally posted by Krypton
If you're going to invest in a bank, invest only in one you think has a solid balance sheet. I analyzed the Dow Jones maybe a month ago and the best bank I got was JP Morgan. Here are the results, according to something I call the Nathan Multiple (NM), named after myself of course...The lower the NM, the better.
THIS LIST IS RANKED FROM WORST TO BEST
1. C -> 2.83
2. BAC -> 2.69
3. JPM -> 1.49
So according to the Nathan Multiple, JPM is the only bank on the Dow Jones which is expected to increase earnings, even though by 2%, that's better than 0% to negative %. I value JPM around $43, and today it rose 12% to $40, so according to my valuation, it's only 6% undervalued. BAC and C are both valued at more than 30% undervalued, but they carry higher risks, because their expected earnings growth is negative, and the Nathan Multiple values earnings growth as the most important factor in the equation. But also keep in mind that BAC is thought of as one of those "fortress banks", so it may not be that risky in the long. But then again, we're talking about the financial sector and they have royally f*cked themselves over...
EDIT: also, the last time i analyzed JPM's fundamentals, I got a high HOLD rating. All in all, this bank will weather this storm with no problem. Hell, they bought Bear Sterns! |
Thanks, but I was thinking more short term movement. Turns out that I'm out of luck today because my sell proceeds are locked til Monday and what I spent on it was my cash reserves. On another note, who'd have thought things would be priced like they are today? Futures are double digit percentage gains for every financial stock, with WM and WB up like 50% again today. I'm kicking myself that I sold the WB, but it'd have been stupid to have passed up a 45% gain with this uncertainty in the market. Oh well.
Oh, and the US bans shorting on 799 financial stocks - far to heavy handed in my opinion. |
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| diggerz |
| buy VOD.L - 1.40% // IBM - 0.66 (20 min delay approx %) |
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| Shakka |
| Krypton, you still long DRYS and those marine transport names? Yuk! Have you seen the Baltic Dry index lately? |
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| Krypton |
| quote: | Originally posted by Shakka
Krypton, you still long DRYS and those marine transport names? Yuk! Have you seen the Baltic Dry index lately? |
I haven't done an analysis on them for more than a month, because I've been busy with school. Shipping rates are going down because of the global slowdown, that is to be expected. But fundamentals-wise, I still think it has long-term potential. I'm thinking years ahead of this bear market, when the economy recovers, and construction picks up again, shipping rates should again pick up as demand for commodities rises once again. But I stress this...it's a long-term pick. Anyone reading this should know, that if I were to buy DRYS, or any of the other dry-bulk shippers, don't expect it'll go up from the time you bought it.
For the traders out there, dry-bulk shipping is a highly volatile sector, whose large movements up and down can be used to make a lot of money. I've seen many times, the likes of EXM or DRYS moving 5-10% in a single day up or down. |
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| Groundhog Boy |
| quote: | Originally posted by Krypton
I haven't done an analysis on them for more than a month, because I've been busy with school. Shipping rates are going down because of the global slowdown, that is to be expected. But fundamentals-wise, I still think it has long-term potential. I'm thinking years ahead of this bear market, when the economy recovers, and construction picks up again, shipping rates should again pick up as demand for commodities rises once again. But I stress this...it's a long-term pick. Anyone reading this should know, that if I were to buy DRYS, or any of the other dry-bulk shippers, don't expect it'll go up from the time you bought it.
For the traders out there, dry-bulk shipping is a highly volatile sector, whose large movements up and down can be used to make a lot of money. I've seen many times, the likes of EXM or DRYS moving 5-10% in a single day up or down. |
They've been going down like 10%+ per day. I think at one point yesterday, EXM was down almost 20%. I've been thinking of accumulating now for the long term since it's down to $16/share. I just don't know when to get in when the whole sector's been falling like a stone the last few months, particularly last week.
I don't know if they'll be able to sustain the $.40 dividend, but if they can, that's a 10% yield at these prices. I don't think that there's any way that DSX can sustain theirs @ $.91 for an under $21 stock, even though they're contracted through part of next year. GNK is another one that might have the same problem, but even if the dividends are halved, they're still high yields. |
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| Krypton |
| quote: | Originally posted by Groundhog Boy
They've been going down like 10%+ per day. I think at one point yesterday, EXM was down almost 20%. I've been thinking of accumulating now for the long term since it's down to $16/share. I just don't know when to get in when the whole sector's been falling like a stone the last few months, particularly last week.
I don't know if they'll be able to sustain the $.40 dividend, but if they can, that's a 10% yield at these prices. I don't think that there's any way that DSX can sustain theirs @ $.91 for an under $21 stock, even though they're contracted through part of next year. GNK is another one that might have the same problem, but even if the dividends are halved, they're still high yields. |
The dividend will definitely come down, I believe. China says its going to boycott Brazilian iron ore, and emerging market shipping yards are struggling with new orders, such as a south Korean shipping yard canceling the construction of 40 ships. The dry-bulk shipping sector is dependant on a strong global economy, and right now, that's just not the case. Vale, the Brazilian iron ore producer, is trying to raise its prices by 11%, after Chinese steel mills already agreed to a 50+% rate hike. Seems like Vale is up to its neck in greed. I'm thinking about playing this for the global economic recovery... |
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| Shakka |
| This is why I like to have a macro backdrop on all of my investing decisions. I do bottom-up micro work, but within the context of top-down investing to figure out what sectors I want to go long and/or short. |
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| Krypton |
| quote: | Originally posted by Shakka
This is why I like to have a macro backdrop on all of my investing decisions. I do bottom-up micro work, but within the context of top-down investing to figure out what sectors I want to go long and/or short. |
Yea, I'm doing a little macro work as well. It doesn't help to own the best house in a bad neighborhood. |
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| Krypton |
Horrible day for the market...
| quote: | Stocks tumble as House defeats bailout plan
Monday September 29, 2:12 pm ET
By Tim Paradis, AP Business Writer
Stocks tumble as financial bailout package is defeated in House vote
NEW YORK (AP) -- Fear swept across the financial markets Monday, sending the Dow Jones industrials down as much as 705 points, as the financial bailout package was defeated by the House.
As the vote was shown on TV, stocks plunged and investors fled to the safety of the credit markets, worrying that the financial system would keep sinking under the weight of failed mortgage debt.
"Clearly something needs to be done, and the market dropping 400 points in 10 minutes is telling you that," said Chris Johnson president of Johnson Research Group. "This isn't a market for the timid." |
http://biz.yahoo.com/ap/080929/wall_street.html |
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| Capitalizt |
| This is a great day for the market actually. Let's hope they don't pass any alternative plan. If nothing is passed, we can finally have true capitulation...a true cleansing of the financial system. Let the bad banks fail. Let the speculators go bankrupt. Let the pain cascade through the markets so risk/reward can finally reach a natural equilibrium again. Once people realize the government is not going to guarantee their investments and backstop their poor decisions, the cancer will be removed from the banking system. It will be very painful for a year or two, but we will be a much healthier nation in the long run. The correction needs to happen eventually. By delaying it further, we will only make it worse when we finally face it. Let it happen now I say. |
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